Guidelines For Tender Process for Property Management Services
For housing providers who have chosen to hire professional property
management/operational services, tendering for these services allows the Board to
obtain the best possible price for the best possible service.
Good tendering practices include:
a comprehensive description of the services to be provided
provision of the same information to all bidders
consistent and fair review of all bids.
Following these practices will help to ensure that all bidders are treated equally and the
resulting decision easier to support.
1. INITIAL PREPARATION
1.1 Role of the Board
The Board should clarify what their role will be in the tender process. Will the
entire Board be involved or will a committee be established that reports to the
Board at various stages in the process?
1.2 Role of the Current Property Management Firm
The Board should clarify the role of their current property manager in the tender
process. If the current property management company intends to submit a bid, it
should have no involvement in the tender process. This will ensure that there is
no conflict of interest and each bidder is treated fairly and equitably. In any
event, the Board should ensure that their property management company
receives the appropriate written notice according to the terms of its contract.
The tender process should commence at least 90 - 120 days before the expiry of
the current contract to allow sufficient time for advertising, receiving bids,
evaluating and awarding the new contract.
1.4 Services Required
The Board should take this opportunity to review the property
management/operational services that are required and identify the functions
that it wishes to delegate. The Board must determine whether to seek a full or
partial services contract from the firm to be hired.
Property management/operational service firms can be hired to perform all
administrative, financial, resident relations and maintenance management
functions or staff may be hired to perform some of these duties. If the Board
chooses to hire both staff and a property management/operational firm then the
duties of each must be clearly defined.
Additionally, the Board should identify any exceptional circumstances that may
have an impact on the responsibilities or fees of the bidding firms. This is
discussed in more detail under Section 2.3 - Outstanding or Exceptional Services.
Information gained at this point can be used to develop the scope of work section
for the tender package, the advertisement and the contents of the contract.
2. DEVELOPING THE TENDER PACKAGE
Appendix 3 provides a sample tender package. This should be referenced while
reading this section.
2.1 Contents of the Tender Package
The tender package should contain all the information a prospective bidder
would need in order to provide a complete and accurate price for the services
required. This could include such information as:
Purpose of Tender
Background details - including rents/occupancy charges, units and client type
Scope of Work - including outstanding or exceptional services
Instructions to Bidders
2.2 Gross Market Rent Potential
Most property management/operational services firms will calculate their fees
based on a percentage of the gross market rent potential of the portfolio, or in
other words, the amount obtained as if all units were rented at market. To assist
those bidders who use this method of fee calculation, the Board could complete
the calculation and include the final amount on the bid submission form. A
sample calculation follows:
The Portfolio consists of:
. 40 x 1 Bedroom Apartments - Market Rent is $800
. 10 x 2 Bedroom Apartments - Market Rent is $1,000
The Gross Market Rent Potential is:
. 1 Bedroom Apartments
40 x $800 x 12 months = $ 384,000
. 2 Bedroom Apartments
10 x $1,000 x 12 months = $ 120,000
Total = $ 504,000
Potential management/operational service fee calculation
A management/operational services fee of 4% based on a gross market rent
potential of $504,000 would be:
$504,000 x .04 = $20,160
For non-profits who do not have market rents, the indexed benchmarked market
rent or Unit Rent Factor (URF) can be used.
2.3 Outstanding or Exceptional Services
Any issue that might have a potential impact on the responsibilities and/or fees
of the property management/operational services firm should be addressed in
the tender documents. For example outstanding issues might be:
Submission of an overdue budget, annual financial statements or an
Annual Information Return
Completion of the annual review of rent-geared-to-income or market
rents/occupancy charges, if overdue
Filling vacancies or returning to target
Breach letter received from Service Manager
Upcoming large capital projects
If maintenance is an ongoing concern for the project, the Board could include the
requirement that all bidders submit an outline of a sample preventive
maintenance plan as part of the tender submission.
Exceptional requests of this nature should be identified in the tender submission
as an exceptional cost which is not included in the base fee. Details regarding its
completion and timing should be included in the contract.
Examples of exceptional services could include:
Completion of an initial inventory of current assets if never completed
Development of a preventative maintenance plan
Development of a management plan (versus updating an existing plan)
3. DETERMINING THE TENDERING APPROACH
There are three basic tendering approaches that can be used for the tendering of
property management/operational services.
3.1 Public Tender
Public tenders are advertised in the newspaper(s) and are open to anyone
meeting the basic criteria described in the advertisement. If the Board plans to
hold an information session, the time and place should be included in the
advertisement. Information sessions allow the Board to meet the prospective
bidders, clarify the selection criteria and identify any issues prior to the
submission of the tender documents. In this way, prospective bidders who do
not meet the Board's requirements do not spend their time preparing a bid which
may not be considered.
3.2 Pre-qualification Tender
This is a two step process. The first step is to identify those firms that can
provide the services required by the Board. An advertisement is placed in the
newspaper(s) and prospective bidders submit the requested information. There
is no request at this point for a price for these services. The submissions are
evaluated and bidders who meet the evaluation criteria are selected for the
second step. Some Boards may interview the selected firms at this point.
The second step is to determine the price for these services. A tender submission
package requesting a bid for the services is then sent to the selected bidders.
Decision making at this point is limited to price only; all other criteria having
been met during the first step.
3.3 Invitational Tender
Using this option, the Board selects a number of property
management/operational service agents they wish to have tender based on the
services and qualifications that the Board has identified.
When bids are by invitation only, there is a chance that it may not provide the
same range of experience as a public tender. Therefore, every effort should be
made to invite a number of property management/operational services firms
with varying experience. A minimum of three firms (we recommend five)
should be invited to ensure the most competitive price.
3.4 Bid Preparation Time
Adequate time for the bidders to prepare their submission is essential for sound
and effective price competition. Four weeks is considered a reasonable time for
the preparation of bids.
If an extension of the closing date becomes necessary, bidders and all other
concerned parties should be notified, in writing, at least four days prior to the
original closing date.
4. PREPARING THE ADVERTISEMENT
(Public and Pre-qualification Tenders Only)
4.1 Area of Search
The Board should determine the area of search for their advertisement to ensure
at least three bids. Rural areas may need to advertise in more than one
newspaper to ensure that they receive a sufficient number of tenders to provide
the services required by the Board.
4.2 The Advertisement
The advertisement to bidders should state the following:
corporation name and location
a general description of the services to be provided
time and location for the information session
time and location for the receipt of Bids
location for access to the Tender Documents and any additional information
such as manuals, management plan, operating agreement etc.
the name of a contact person for enquiries and pick-up of bid forms
that the lowest bid will not necessarily be accepted
that late bids will not be accepted
The description in the advertisement should be detailed enough to allow
potential bidders to decide if the work interests them and if they meet the
necessary qualifications. Advertisements must not limit bidders to only those
firms which have had previous experience managing non-profits or co-
operatives. It is acceptable to indicate that previous experience working with
community based organizations, tenant owned buildings, and/or a non-profit
Board of Directors would be an asset.
5. TRACKING TENDER PACKAGES
A system should be set up that tracks the tender packages as they are sent out
and received. The name of the person requesting the package, as well as the
name and address of the company should be recorded. This allows for follow-up
later in the event that an insufficient number of tenders is received or if changes
have to be made to the tender package before tender closing. The tracking
system should also record any changes to the package or information requests as
well as the receipt of tenders including date and time.
6. RECEIVING BIDS
6.1 Bid Submission
Bids must be submitted in a sealed envelope. A self-addressed envelope may be
provided in the tender package. Upon receipt, the envelope must remain sealed
and the date and time received marked on the front of the envelope.
Bids must not be opened prior to the designated time to ensure the bid amount is
not made available to other bidders. Faxed copies are not acceptable for this
6.2 Bids Received after Closing
Bids received after the designated closing time should be returned unopened to
the bidder with the notation on the Bid envelope "Late Bid - Unopened". Where
there is no return address on the envelope, it should be opened by the Chair of
the Board/Tender Committee to determine the address of the bidder, resealed
and returned with an explanation.
7. OPENING BIDS
7.1 Timing of Opening
Bids should be opened immediately after the tender closing time. This allows
bidders, or their representatives, the opportunity to attend the opening. There
should be a Board member or designate at the opening.
7.2 Information Reviewed at the Public Opening
Information reviewed at the opening should only include the names of the
bidders, the total bid price and whether or not the required schedule(s) have
been attached. Unit prices, prices for items not required by the tender or the
validity of the bids should not be announced at this time. Bidders should be
advised that this is a tender opening only and that evaluation will occur later.
It is recommended that minutes of the opening be kept. The minutes should
include the information announced at the opening and who was in attendance.
These details may be provided to those bidders who were unable to attend the
8. EVALUATING THE BIDS
All bids should be reviewed for completeness. This includes the specifications
outlined in the tender package and the correct completion of the bid form. To be
valid each bid must include:
correct completion of the bid form according to the following:
the bidder's name
the bid amount in words and figures (Where there is a discrepancy between
the written amount and the figures the written amount is used)
the signature of an official of the bidding company
the company seal
description of property management/operational services experience
description of property management & administrative systems
written confirmation of agreement to sign the management/operational services
written confirmation of agreement to sign the Conflict of Interest declaration
Bids that are not complete according to the above criteria are to be disqualified.
The Board should prepare a list of minimum criteria which must be met by the
firm in order to qualify for the contract. The Board should evaluate each
submission against these criteria such as:
Knowledge of general property management practices and relevant
Experience of the firm in property management/operational services
Knowledge/experience of the firm in non-profit housing management and/or
plan to hire that knowledge/experience
Experience of the individuals assigned to the project(s)
8.3 Bid Amount
When reviewing the amount of the bids, the Board should consider if the
is within the approved budget
represents good value for the volume and type of work being contracted
is representative of the going rate within the market
9. DISQUALIFYING BIDS
Bids may be disqualified for any of the following reasons:
incomplete bids i.e. not all schedules attached
bids not submitted on the prescribed Bid form
bids not received prior to the closing time
The bidder should be advised in writing if their bid is disqualified.
10. SINGLE BID
If a single bid is received, the Board should ensure that the bid amount is kept
confidential in the event that the Board decides to re-issue the tender. In these
instances the following options are available:
the bid can be returned unopened, thereby protecting the bid amount and the
bidder advised that the tender will be re-issued.
the bid could be opened in confidence and if the bid is thought to be
acceptable, based on the budget and the selection criteria approved by the
Board, the bid should be presented at the next Board of Directors meeting for
resolution (award, cancellation of tender call, re-tender etc.) If the bid is not
acceptable to the Board, the bid should be returned to the bidder resealed
with a letter of explanation.
11.1 Importance of the Interview
The Board may want to interview the two or three lowest bidders. At a
minimum, the lowest bidder, who meets all the tender evaluation criteria should
be interviewed. The purpose of the interview is to confirm the knowledge,
experience and suitability of the bidder. It is also an opportunity for the Board to
ensure that the potential property management/operational services firm is fully
aware of any issues that may impact on their responsibilities.
11.2 Interview Questions
Sample interview topics are attached. The Board can use these topics to develop
their own interview questions. Each question should then be given a point score
based on its importance. Points are then totalled at the end of each interview for
each bidder. If more than one bidder is interviewed, the same set of questions
should be used for all.
12. REFERENCE CHECK
The Board should conduct a reference check for the bidder(s) they are seriously
considering for the award. If references are going to be checked for more than
one bidder, the questions should be the same for all. Some areas that could be
investigated through the reference check include:
confirmation of experience (financial management track record, etc.) as
provided in the tender submission
relationship with residents
relationship with the owner/board of directors
For those references from former employers of the bidder, the Board should
determine, in addition to the above, the reason for non-renewal or termination of
13. AWARD OF TENDER
13.1 Confirmation of Acceptance
The Board of Directors should formalize the acceptance of the bid in writing.
Arrangements to sign the contract should be included. At this point the Board
should notify the unsuccessful bidders.
13.3 Awarding to Other than Lowest Bidder
Circumstances may justify awarding the contract to other than the lowest bidder.
In these instances, the Board must ensure that a full and consistent evaluation of
all proposals has been undertaken and that the reasons for not accepting the
lowest bidder have been clearly documented.
SAMPLE INTERVIEW TOPICS
A. The housing provider Administrative
G Description of the project/portfolio G Legislative requirements (Building
G Expectations of the board Code, Fire Code, WHMIS, HSA,
G Issues related to project/portfolio PIPEDA, AODA etc.)
G Contract administration
G Reporting to the board of directors
B. Knowledge of General Property G Community relations
Management Requirements G Tenant involvement
G Corporate reporting requirements
G Preventive maintenance C. Previous Property Management
G Repair requests Operational Services Experience
G Capital reserve plan G Private market experience including
length of time & portfolio size
Tenants G Social housing experience including
length of time & portfolio size
G Arrears collection G References
G Filing Tribunal documents D. Knowledge of Social Housing
G Lease administration Program Requirements
G Marketing plan
G Tenant notice requirements G Co-ordinated Access System for RGI
Financial G Market/RGI Target Plan
G Annual income review process for RGI
G Financial records and systems households
G Financial reports/AIRs/audits G Rent calculations for rent-geared-to-
G Tendering/quotes income tenants
G Budget process G Reporting requirements
G Other Housing Services Act requirements